HONG KONG: Call For Dignity For All In Retirement

HONG KONG (South China Morning Post), May 6, 2006: Critics and legislators call for the implementation of a universal retirement protection for the aged. The present system discriminates against low-income groups, house-wives and the unemployed. The number of seniors claiming social security has surged over the past two decades. As Hong Kong's population rapidly ages, a comprehensive pension funding scheme is more than ever necessary. Though boasting a $ 14 billion (11 billion euros) surplus, the government is reluctant to implement pension schemes which might prove to be unpopular with middle-class voters. Legislator Lee Cheuk-yan called this week for the implementation of a universal retirement scheme. According to him, pensions should be raised to $ 2,500 (2,000 euros) for all retirees. Profit taxes should be increased on companies earning over $10 million (800,000 euros) a year, raising pension to $3,000 (2,300 euros). Given the government's financial surplus of $14 billion (11 billion euros), such a scheme would be affordable and preserve the dignity of older generations. The situation will soon become critical for seniors. By 2033, 27% of Hong Kong's population will be over 65 years old according to the Census and Statistics Department. The city's elderly dependency ratio (the 65+ as a proportion of the working population) will almost triple of the next thirty years and reach 428 per 1,000 in 2033. The number of poor retirees claiming social security assistance has also escalated from 40,000 to 150,000 today. The present system, established in December 2000, discriminates against low-income retirees and the unemployed. Today, companies must contribute to the Mandatory Provident Fund (MPF). But for employees who earn small wages, the contributions do not guarantee them a decent standard of living when they retire. Companies often avoid paying their contributions by forcing workers to be officially self-employed or by dividing income into small sums so that they do not have to pay the MPF. Today, employers payments are much lower than the 5% required by the law. Copyright © 2006 South China Morning Post Publishers Ltd.